A company is called private limited when all its shares are in private hands. Pvt Ltd Company is owned by a group of promoters. On the other hand, the shares in a Public Limited company are open to everyone. The company is not in the hands of a few promoters but the public owns it.
There is also difference in the number of shareholders in the two types of companies. In Private Limited companies, the minimum number of shareholders should be two and the maximum 50. On the other hand, the minimum number of shareholders in a Public Ltd Company is seven and there is no limit to the maximum number of shareholders.
When talking of shares, the shares can be freely transferred in a Public Limited Company whereas it is not possible in a Private Limited company. If ever the shares of a Pvt Ltd company have to be transferred, the consent of the shareholders must be sought. Pvt Ltd Company cannot make a public offer of its shares. On the contrary, Ltd companies can make a public offer through advertisements.
The shares of a Limited company are listed in the stock exchange whereas it is not in the case of Private Limited Company. This means that trading happens with a Ltd company in the stock exchange and nothing of that sort happens with a Pvt Ltd company.
A Private Limited company is a partnership firm where as Public Limited company is a full-fledged corporate body.
Thank you for wonderful explanation Garima i have a query as according to the HR which company will be good for the career is it pvt ltd or public ltd.... Regards, Ramkishore
The shares of a Private Limited Company are closely held, i.e., the ownership is controlled by a few persons (could be a natural person or an artificial person like company, trust, etc.,). Also, since the shares of a private limited company are closely held, the reporting structure and regulatory framework for maintaning a Private Limited Company is consideraly more easier, when compared to a Public Limited Company. To know more about a Private Limited Company, you can visit IndiaFilings.com
The shares of a Public Limited Company on the other hand are held by a large number of people and the shares of Public Limited Companies are traded on a stock exchange like the BSE / NSE. Since, a large number of people from the public are invested in a public limited company, the SEBI is also involved in monitoring a Public Limited Company and the requirements of reporting are much more stringent. To know more about a Public Limited Company, you can also visit IndiaFilings.com
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